Keir Starmer refuses to rule out more tax rises as he brands Tories ‘fantasists’ in fiery PMQs clash

The Leader of the Opposition looked to grill the Prime Minister on measures introduced in Rachel Reeves's maiden Budget, including the hike to employers' National Insurance Contributions.

Putting pressure on Starmer to rule out any new tax rises in 2025, Badenoch said: "The Prime Minister refused to repeat his Chancellor's promise that she would not come back for more, will he now rule out any new tax rises this year?"

Sir Keir Starmer with Kemi Badenoch

PARLIAMENT TV

Sir Keir Starmer

PA

"The Prime Minister may try to blame his inheritance, or blame global factors. But why should anyone trust a word he says over the businesses who are saying again and again that his budget means fewer jobs, lower growth and higher borrowing costs?"

However, Starmer responded with fury, accusing his Tory rivals of being "economic vandals and fantasists".

He said: "We had to deal with the £22billion black hole that they left, made difficult cuts, raised taxes to invest in health, public services and housing, vital to disability, vital to growth, and we’ve got an ironclad commitment to our fiscal rules, and she will welcome, no doubt, the inflation figures from this morning.

"But contrast that with the party opposite, they weren’t brave enough in government to take those difficult decisions. They’ve opposed all of our measures to stabilise the economy and promote growth.

"They’re back to the magic money tree, she wants all the benefits of the budget, but she can’t say how she’s going to pay for them. They haven’t changed, they’re still economic vandals and fantasists, imagine where we’d be if they were still in charge."

Kemi Badenoch

PA

Starmer could also not resist taking a swipe at former Prime Minister Liz Truss.

After Truss last week sent a cease and desist letter over Starmer's criticisms of her handling of the economy, the Prime Minister quipped: "I got a letter this week from a Tory voter in a Labour seat. I hope they don't mind me saying who it was, it was Liz Truss.

"It wasn't written in green ink but it might as well have been. She was complaining that saying she crashed the economy was damaging her reputation. It was crashing the economy that damaged her reputation."

Truss, who dramatically lost her South West Suffolk seat in the 2024 General Election, claimed commentary around her calamitous 2022 mini-budget were both "false and defamatory".

But Badenoch's attacks on the economy came as Reeves received some good news about inflation.

The UK witnessed an unexpected December consumer price dip to around 2.5 per cent, having previously stood at 2.6 per cent in November.

Rachel Reeves

GETTY

However, the Chancellor last week came under pressure after a surge in borrowing costs resulted in 30-year gilt yields hitting levels not seen since 1998 and 10-year gilt yields spiking to a post-2008 peak.

The pound also tumbled against the dollar as a result of market turmoil, falling from a summer high of $1.34 to a 15-month low of $1.23.

Reeves was later accused of "fleeing" scrutiny after opting to embark on a trade trip to China rather than addressing concerns in the House of Commons.

The Chancellor faced fresh pressure just yesterday after laughing off Tory fury about the market meltdown.

Following yesterday's exchange with Shadow Chancellor Mel Stride, Reeves said: "We have seen global economic uncertainty play out in the last week.

"But leadership is not about ducking these challenges, it is about rising to them.

"The economic headwinds that we face are a reminder that we should – indeed, we must – go further and faster in our plan to kickstart economic growth."